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Defense Minister Gantz (L), Foreign MInister Lapid (C) and Prime Minister Bennett. Photo: Ilia Yefimovich/picture alliance via Getty

The Israeli government is forming a special team to manage the fallout from reports that software developed by Israeli firm NSO was used by governments around the world to spy on journalists, human rights activists and possibly world leaders, two Israeli officials tell me.

Why it matters: So far, this is primarily a media crisis for Israel. But senior Israeli officials are concerned it could morph into a diplomatic crisis.

Driving the news: An international consortium of investigative journalists reported on Sunday that NSO's "Pegasus" software — designed to track terrorists and criminals — had become a valuable tool for governments to spy on journalists and critics. Among the countries listed in the reports as NSO clients are Hungary, India and Saudi Arabia.

  • The Israeli officials told Axios that NSO's export license included terms about the misuse of spyware, the reports would likely influence future deals involving NSO and other Israeli companies.
  • “It is a very substantial crisis," a senior Israeli official told me. "We are trying to fully understand its ramifications. We will have to check whether the reports about NSO warrant a change in our policy regarding the export of offensive cyber technology to other countries."

What they're saying: A hint of the possible diplomatic fallout was provided Wednesday by the U.K.’s cyber czar, Lindy Cameron.

  • “We now see states that cannot build high end capability being able to buy it," Cameron said at a cyber conference in Tel Aviv, adding that it was "vital that all cyber actors use capabilities in a way that is legal, responsible and proportionate to ensure cyberspace remains a safe and prosperous place for everyone. And we will work with allies to achieve this."

Israeli Minister of Defense Benny Gantz spoke at the same conference and said Israel was "studying" reports about the alleged use of the Pegasus software in violation of the terms of its export license. 

  • “We approve the export of cyber products only to governments and only for lawful use in order to prevent crime and terrorism. Countries who purchase those systems must adhere to the conditions of use," Gantz said.
  • NSO continues to deny the reports and claim to have taken all possible steps to ensure its software wasn't used for anything other than fighting crime and terrorism.  

Details: The interagency team includes representatives from the Ministry of Defense, which is in charge of defense export licenses, the Foreign Ministry, the Ministry of Justice, the Mossad spy agency, military intelligence and other agencies.

What's next: The team plans to start a discussion with NSO about the reports while also performing damage control over the diplomatic, security and legal ramifications, the Israeli officials said.

Go deeper

Oct 26, 2021 - World

Scoop: Biden administration objects to Israeli settlements plan

Israeli PM Naftali Bennett (L) meets with Secretary of State Tony Blinken. Photo: Olivier Douliery/Pool/AFP via Getty

The Biden administration has privately protested to the Israeli government over its plan to approve the planning and construction of more than 3,000 new housing units in the Israeli settlements in the occupied West Bank, sources briefed on the issue tell me.

Why it matters: The approvals for new homes in the settlements will be the first since President Biden assumed office, and come after Biden and his top aides personally pressed Israeli Prime Minister Naftali Bennett to restrain settlement activity and decrease the number of new housing units.

Oct 27, 2021 - World

Putin seeks Israel's help in easing U.S. sanctions on Syria

Israeli Prime Minister Naftali Bennett (L) and Russian President Vladimir Putin in Sochi. Photo: Yevgeny Biyatov/Sputnik/AFP via Getty Images

Russian President Vladimir Putin asked Israeli Prime Minister Naftali Bennett to encourage the Biden administration to ease some of its sanctions on Syria in order to allow Russian companies to take part in the reconstruction of the country, Israeli officials briefed on the talks tell me.

The big picture: The U.S. Caesar Act, which was signed into law by President Trump in Dec. 2019, imposed sanctions on several sectors of the Syrian economy, including energy and infrastructure. The law is the main deterrent for foreign companies interested in getting involved in the Syria reconstruction effort.

Too big to cover alone: Newsrooms team up

Illustration: Annelise Capossela/Axios

News outlets are increasingly willing to work together on big, multifaceted stories — including this week's reporting on leaked documents from a Facebook whistleblower.

Why it matters: Collaborative efforts help bring more resources to bear on complex stories, some of which require a global reporting effort. But they require high degrees of coordination, and competition can sometimes get in the way.